On 30 May 2024, the Council of the EU announced that it has adopted the Directive updating the Capital Requirements Directive as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (CRD VI) and the Regulation updating the Capital Requirements Regulation as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (CRR III).

CRD VI and CRR III set out new rules aimed at making banks operating in the EU more resilient to possible economic shocks. The changes aim to increase the resilience of banks, strengthen their supervision and reinforce risk management, as well as strengthening supervision and sustainability in the banking sector.

For more information on the legislative package, see our previous blog.

Next steps

This was the final step of the adoption procedure. The texts will now be published in the Official Journal of the EU and enter into force 20 days later.

Member States will have 18 months to transpose CRD VI into national legislation, whilst CRR III will apply from 1 January 2025.